While property investors do their best to minimize risk in every purchase, Michael Xia—a 31-year-old investor that has successfully built a 14-property portfolio worth $4 million in a span of 12 years—believes that one can succeed in property investment better by looking for problems and formulating strategies to solve them.
According to him, one of the most important skills he has acquired as a property investor is the ability to find problems and make the most out of them by determining the best way to solve them.
“The more problems that you solve, the more that you stand to gain from the property,” he said.
Looking back on his first purchase, Michael believes that he would have been better off had he not bought a brand new property devoid of any issues.
“That off-the-plan property that I bought did not solve any problems… I bought it and it was brand new and shiny. The developer and the builder solved all the problems for me. I walked into a finished product. It stands that… the developer and the builder would make the gains from that property,” he explained.
“Moving down the track in terms of properties that I’ve done well in, there’s been problems in terms of [a] hole in the wall, bad carpet, bad paint… I’ve gone in and solve those problems, then I stand to gain from them.”
The bigger the problems are on the property, the more an investor stands to gain, but it would also mean having to deal with greater risks, according to Smart Property Investment’s Phil Tarrant and James Mitchell.
Their advice to budding property investors is to build confidence by educating yourself and finding the best mentors to guide you through your journey.
James concluded: “Obviously, people have different risk profiles… [but] regardless of your ambition, their talent, and their aptitude, you obviously need to do some work and you learn from experience. Having a good team of professionals around you, whether it’s a mortgage broker or accountant, is probably the most important thing.”
Tune in to Michael Xia’s episode on The Smart Property Investment Show to know more about how he recovered from his problematic property choices to build a 14-property portfolio and how he plans to get his passive property income up from $40,000 per annum to over $1 million.